The yen continued to decline at the start of trading this week following the action of the Japanese central bank (BOJ) offering for an unlimited purchase of 10-year Japanese government bonds at 0.25%, after bond yields rose to a 6-year high.
The yen’s depreciation continued to leave room for the US dollar to remain ahead in the safe-haven currency trading cluster continued in recent weeks.
On the price chart of the USD/JPY pair, the price has managed to maintain the bullish trend movement pattern entering the fourth week.
The price surge that started from the support zone of 114.700 has passed the level of 122.00 at the end of last week's trading session, thus recording the latest 7 -year high above the price high in January 2016.
The price surge does not seem to have stopped so far as the price continued to rise at the opening of the Asian session this morning beyond the 123.00 level.
The price remains moving in a bullish trend supported by the Moving Average 50 (MA50) support level on the 1 -hour time frame on the USD/JPY chart.
The rise continued at the beginning of the European session reaching a high of 123.800 overcoming the price resistance zone in November and December 2015 trading.
The rise is seen to be continued and likely to continue in the next session with the expectation to head to the high level of 125.800.
The height is a resistance zone that was tested in August 2015 trading and is the highest zone reached after 2002.
As for the expected decline, the level around 121,500 is seen to be the initial support level to test the price.
A lower decline will test the 120.500 level before the next level target is around 118.00.
